Publications on Internal devaluation
One-Pager No. 32 | June 2012Ireland was at one time the poster child for fiscal austerity, but that country’s disappointing economic performance of late has left austerity apologists searching for a new model—and the Baltic economies appear to be next in line. But Estonia, Latvia, and Lithuania are as unsuited to stand as successful models of expansionary fiscal contraction and “internal devaluation” as their Irish predecessor.
Download:Associated Program:Author(s):Rainer Kattel Ringa Raudla
Policy Note 2012/5 | June 2012
The Baltic States and the Crisis
The commonly cited example of the successful application of “internal” devaluation as a strategy for economic recovery is that of the Baltic economies. In this Policy Note, we discuss whether the Baltic austerity plan worked, how it was designed to work—and, most important, whether it can be replicated anywhere else. We argue that the Baltic recovery has unique features that do not relate to domestic austerity policies, nor are they replicable elsewhere.Download:Associated Program:Author(s):Rainer Kattel Ringa Raudla
One-Pager No. 26 | February 2012
Improving Competitiveness by Reducing Living Standards and Increasing PovertyGreece’s new EU/IMF bailout package is all about private sector wage cuts and an overhaul of labor rights. In short, it will do absolutely nothing to address the nation’s economic crisis because it is not designed to rescue Greece’s embattled economy. In fact, it will have the unwanted effect of keeping the nation locked in a vicious cycle of debt—and leading, finally, to its exit from the eurozone.Download:Associated Program:Author(s):C. J. Polychroniou